Question 1

Vera enters into a contract to work as a lifeguard at Water Park for the summer in exchange for a weekly paycheck. The duties under this contract will be discharged when the duties are
A) avoided.
B) breached.
C) conditioned.
D) performed.

Accepted Answer

The duties under the contract will be discharged when they are performed, meaning that Vera fulfills her obligations as a lifeguard for the entire summer in exchange for her weekly paycheck. Avoiding or breaching the contract would not discharge the duties, and conditioning would involve setting specific terms or requirements for each party to meet before the duties are considered fulfilled.

Question 2

Sara enters into a contract to sell her condo to Ted for a certain price on a specific day. On that day, Sara unconditionally offers to perform. Sara's offer
A) conditions Ted's promise to pay for the property.
B) constitutes tender of performance.
C) excuses the parties' performance under the contract.
D) suspends the parties' contractual obligations.

Accepted Answer

Sara's offer to perform constitutes tender of performance, meaning she is ready, willing, and able to perform her obligations under the contract. This does not condition Ted's promise to pay, excuse the parties' performance, or suspend their obligations.

Question 3

Gliders, LLC, and Hang Time, Inc., are parties to a contract. They subsequently agree that In the Wind Inc. should take Gliders' place and assume all of its rights and duties under the contract. This is
A) a mutual agreement to rescind.
B) an accord and satisfaction.
C) a novation.
D) specific performance.

Accepted Answer

This is a novation. Novation occurs when a new party takes over the obligations of one of the original parties under a contract, providing the original party is released from these obligations. In this case, In the Wind Inc. is taking over the rights and duties of Gliders, LLC, which means that Gliders is released from its obligations under the contract.

Question 4

Gil agrees to buy Howe's Bakery on the express condition that the bakery's suppliers extend the same credit terms to Gil that the suppliers currently extend to Howe. This approval is
A) a concurrent condition.
B) a condition precedent.
C) a condition subsequent.
D) an implied condition.

Accepted Answer

This is a condition precedent because it is a condition that must be met before the contract (the purchase of the bakery) can be completed.

Question 5

Megan contracts to sell Nonny her horse for $4,000. This contract will be fully discharged when Megan and Nonny
A) execute a bill of sale.
B) exchange the horse for the money.
C) sign a receipt.
D) agree that the deal is fair.

Accepted Answer

The contract will be fully discharged when Megan and Nonny exchange the horse for the money, as this act fulfills the obligations of both parties under the contract.

Question 6

East Bay Café orders seafood from Fresh Catch Company. Fresh places the goods at East's disposal. Fresh's performance under the contract is
A) conditional.
B) complete.
C) material.
D) substantial.

Accepted Answer

Fresh Catch Company has fulfilled their duty by placing the goods at East Bay Café's disposal, therefore their performance under the contract is complete.

Question 7

Hilton enters into a contract to erect a fence around Irene's cattle pasture. When the fence is built, Hilton's performance will be
A) conditional.
B) complete.
C) material.
D) substantial.

Accepted Answer

Hilton's performance will be considered complete once the fence is built as per the contract. There are no conditions attached to Hilton's duty to build the fence, and therefore, it is not conditional. The fence is the only thing that Hilton is required to build, and once it is built, Hilton's performance is considered complete. The terms "material" and "substantial" are not applicable in this scenario as they refer to the quality or importance of the performance, which is not relevant to the question.

Question 8

A novation requires
A) the existence of a previous, valid obligation.
B) consideration greater than $5,000.
C) performance of the original contract by all of the parties.
D) an accord and satisfaction.

Accepted Answer

A novation occurs when a new contract replaces and discharges a previous valid obligation. Therefore, the existence of a previous, valid obligation is necessary for a novation to occur. Consideration greater than $5,000, performance of the original contract by all parties, and an accord and satisfaction are not required for a novation.

Question 9

State University provides housing on campus and in some adjacent off-campus neighborhoods. To lease a university house or apartment, a person must be a student at State. This requirement is
A) a condition.
B) a novation.
C) a breach of contract.
D) an operation of law.

Accepted Answer

The requirement that a person must be a student at State in order to lease a university house or apartment is a condition of the contract. A condition is a requirement that must be met in order for the contract to be binding. In this case, the condition is that the person must be a student at State.

Question 10

Drain Equipment Inc. contracts to sell its assets to Earth Aquatic Corporation. Before either party has performed, rescission of this contract requires
A) a mutual agreement to rescind.
B) an accord and satisfaction.
C) a novation.
D) specific performance.

Accepted Answer

Rescission means both parties agree to cancel the contract. Therefore, a mutual agreement to rescind is required. An accord and satisfaction is a type of settlement for a breach of contract, not a rescission. Novation is a substitution of a new party for one of the original parties to the contract, also not applicable in rescission. Specific performance is a remedy for breach of contract where the court orders the defendant to perform the contract, again not applicable in this case where there has been no performance yet.

Question 11

Iggy and Jon sign a contract by which Iggy agrees to deliver and install a gas fireplace on October 15 in exchange for Jon's promise to pay the $500 price within ten days of the install date. The delivery and installation of the fireplace and the payment of the price are examples of
A) conditions precedent.
B) concurrent conditions.
C) conditions subsequent.
D) implied conditions.

Accepted Answer

The delivery and installation of the fireplace and the payment of the price are concurrent conditions because both parties are expected to perform their obligations at the same time or in a manner that is dependent on the other party's performance.

Question 12

Restoration Inc. enters into a contract to refurbish an old bus depot for Quality Café LLC. If Restoration completes most of the work promised in the contract, its performance will be
A) conditional.
B) complete.
C) material.
D) substantial.

Accepted Answer

Substantial performance is a standard used in contract law to determine when a party has faithfully fulfilled its obligations under the contract. It means that even if a party has not fully completed every detail of the contract, as long as they have made a good faith effort to complete most of the work and the remaining deficiencies do not affect the value of the work completed, their performance will be considered substantial.

Question 13

Gina enters into a contract to buy a commercial building from Hope for a certain price subject to an appraiser's evaluation of the structure's condition. If the appraiser deems the condition to be substandard, the parties' obligations will be
A) breached.
B) discharged.
C) altered.
D) unaffected.

Accepted Answer

The contract is contingent upon the appraiser's evaluation. If the condition is deemed substandard, the contingency is not met, and the parties' obligations are discharged.

Question 14

Inez hires Josh to paint her portrait to her satisfaction for $4,000. When Josh finishes the portrait, Inez announces that she is not satisfied with it. Inez
A) must pay Josh the contract price.
B) must pay Josh half of the contract price as a compromise.
C) must pay Josh only the cost of his materials.
D) does not have to pay Josh.

Accepted Answer

The answer of Inez hires Josh to paint her portrait...

Question 15

Security Company enters into a contract with Tower Apartments to deliver and install an alarm system for a certain price. Both parties perform the acts as promised. The contract is
A) conditioned.
B) terminated.
C) excused.
D) suspended.

Accepted Answer

When both parties to a contract have performed the acts they promised, the contract is considered terminated because its terms have been fulfilled.

Question 16

Architects LLC enters into a contract with Barns & Silos Inc. to provide designs for a certain number of farm buildings. Architects provides fewer than half of the designs by the time specified in the contract because the firm is busy with other projects. Architects' performance is most likely
A) a material breach.
B) a minor breach.
C) a reasonable breach.
D) no breach.

Accepted Answer

Failing to provide more than half of the designs by the specified time is a significant failure to perform contractual obligations, constituting a material breach.

Question 17

Debt Collection Service enters into a contract to employ Emma as a billing manager for two years. During the first year, Emma is often absent without explanation and when present fails to adequately do her job. This
A) discharges the employer from the contract.
B) has no effect on the employer's performance.
C) changes the employer's duties under the contract.
D) suspends the employer's duty to perform.

Accepted Answer

Emma's persistent absence without explanation and inadequate job performance constitute a breach of contract. This breach discharges the employer from the contract, meaning they are free to terminate the contract without penalty.

Question 18

Dairy Farm enters into a contract with Edible Ice Cream Inc. to supply milk. Later, Dairy decides that it is no longer advantageous to fulfill the contract and subsequently fails to perform as promised. Edible files a suit against Dairy. A breach occurred when Dairy
A) entered into the contract.
B) decided that it was not advantageous to fulfill the contract.
C) failed to perform as promised.
D) was sued by Edible.

Accepted Answer

The breach occurred when Dairy failed to perform as promised, which goes against the terms of the contract. Entering into the contract is not a breach of contract, nor is it when Dairy decided it was not advantageous to fulfill the contract. Being sued by Edible is a consequence of the breach, but not the breach itself.

Question 19

Juan and Isidro enter into a contract to buy, restore, and reopen the Coastal Park Carousel. Before either party begins to perform, they make a new agreement to rescind their deal. This
A) discharges the original contract.
B) has no effect on Juan's performance.
C) changes Isidro's duties under the contract.
D) suspends both parties duties to perform.

Accepted Answer

Rescinding a contract essentially means cancelling it out, which would discharge the original contract. Therefore, neither party would have any duties to perform under the original contract as it is no longer in effect. This rescission does not change any duties or obligations under the original contract, as it is as if the contract was never formed.

Question 20

Bottling Company enters into a contract with Chug's Brewery to provide certain bottling and delivery services. Before Bottling starts to work, the market price rises for the fuel for glass ovens. Bottling tells Chug's that due to the added cost it will not perform their deal. Bottling's contractual obligation to Chug's is
A) breached.
B) discharged.
C) rescinded.
D) suspended.

Accepted Answer

Bottling Company is in breach of their contractual obligation to Chug's Brewery by refusing to perform the services they agreed to provide. The fact that there is a rise in fuel costs does not discharge or rescind the contract, nor is it a valid reason to suspend performance. Bottling Company is still obligated to fulfill the terms of the contract, even if it has become more costly to do so.

Quiz 16: Performance and Discharge

Vera enters into a contract to work as a lifeguard at Water Park for the summer in exchange for a weekly paycheck. The duties under this contract will be discharged when the duties are

Sara enters into a contract to sell her condo to Ted for a certain price on a specific day. On that day, Sara unconditionally offers to perform. Sara's offer

Gliders, LLC, and Hang Time, Inc., are parties to a contract. They subsequently agree that In the Wind Inc. should take Gliders' place and assume all of its rights and duties under the contract. This is

Gil agrees to buy Howe's Bakery on the express condition that the bakery's suppliers extend the same credit terms to Gil that the suppliers currently extend to Howe. This approval is

Megan contracts to sell Nonny her horse for $4,000. This contract will be fully discharged when Megan and Nonny

East Bay Café orders seafood from Fresh Catch Company. Fresh places the goods at East's disposal. Fresh's performance under the contract is

Hilton enters into a contract to erect a fence around Irene's cattle pasture. When the fence is built, Hilton's performance will be

A novation requires

State University provides housing on campus and in some adjacent off-campus neighborhoods. To lease a university house or apartment, a person must be a student at State. This requirement is

Drain Equipment Inc. contracts to sell its assets to Earth Aquatic Corporation. Before either party has performed, rescission of this contract requires

Iggy and Jon sign a contract by which Iggy agrees to deliver and install a gas fireplace on October 15 in exchange for Jon's promise to pay the $500 price within ten days of the install date. The delivery and installation of the fireplace and the payment of the price are examples of

Restoration Inc. enters into a contract to refurbish an old bus depot for Quality Café LLC. If Restoration completes most of the work promised in the contract, its performance will be

Gina enters into a contract to buy a commercial building from Hope for a certain price subject to an appraiser's evaluation of the structure's condition. If the appraiser deems the condition to be substandard, the parties' obligations will be

Inez hires Josh to paint her portrait to her satisfaction for $4,000. When Josh finishes the portrait, Inez announces that she is not satisfied with it. Inez

Security Company enters into a contract with Tower Apartments to deliver and install an alarm system for a certain price. Both parties perform the acts as promised. The contract is

Architects LLC enters into a contract with Barns & Silos Inc. to provide designs for a certain number of farm buildings. Architects provides fewer than half of the designs by the time specified in the contract because the firm is busy with other projects. Architects' performance is most likely

Debt Collection Service enters into a contract to employ Emma as a billing manager for two years. During the first year, Emma is often absent without explanation and when present fails to adequately do her job. This

Dairy Farm enters into a contract with Edible Ice Cream Inc. to supply milk. Later, Dairy decides that it is no longer advantageous to fulfill the contract and subsequently fails to perform as promised. Edible files a suit against Dairy. A breach occurred when Dairy

Juan and Isidro enter into a contract to buy, restore, and reopen the Coastal Park Carousel. Before either party begins to perform, they make a new agreement to rescind their deal. This